Australian police bust tax evasion, laundering ring

AFP , SYDNEY

Sat, Jun 11, 2005 - Page 4

Australian police have cracked an A$300 million (US$230 million) offshore tax evasion and money-laundering racket involving rich people from "the big end of town," officials said yesterday.

The breakthrough was announced after police raided 48 locations in four Australian states in a joint operation by the Australian Crime Commission (ACC), Australian Tax Office and federal police.

No arrests were made but Ellison said 12 "high-wealth individuals" had been identified as "persons of interest."

"This is the big end of town that we've targeted here," he said.

"It is alleged that there has been a massive avoidance of tax ... and that these search warrants are essential to gaining further evidence.

"And of course, it sends a very clear message that all people in Australia are subject to paying tax," he said.

Ellison said authorities were examining operations in four other countries but he declined to identify them due to ongoing investigations.

The ACC said the investigation, code-named "Operation Wickenby," began in October and involved 285 police and tax office personnel as well as foreign agencies. Police from the ACC executed 48 search warrants over the previous 48 hours in the states of New South Wales, Queensland, Victoria and Western Australia and the tax office took action to access documents in a further 37 locations.

The ACC said the investigation covered promoters and participants allegedly involved in an organized tax fraud and money laundering operation using offshore financial schemes.

In some cases, deductions were claimed for payments for expenses and services that were fictitious, while in other cases, assessable income derived offshore was not brought to account in Australia, officials said.

"This income is secretly returned to Australia disguised as a loan, an inheritance, a gift, or through credit and debit cards," the tax office said in a statement.